Avianca Award Changes Model Pricing Variability

Avianca announced positive changes to their award chart for domestic United States awards with some variability, It is a perfect model for how US airlines, like American, can avoid throwing out award charts but still adding value to both the carrier and passenger.

Avianca Announces Reduction in intra-US Awards

This week Avianca announced changes to their partner awards for domestic US flights, which apply exclusively to United Airlines. A counter to usual “enhancements” to mileage programs, these changes were nearly all positive. Plenty of other writers have detailed the specifics of the changes which include smart reductions in the number of miles and co-pay dollars required for a trip, the largest increase appeared to be 1,000 miles and $10 more dollars.

My target routes that add value to my life are Pittsburgh to Newark for 6,500 points each way and $15. Short haul direct flights in the northeast are a particular pain point for me because the distance is so short yet the costs are routinely high.

Flexibility That Works for Airlines

Seats on short flights often built for connections rather than O&D (origin and destination) traffic. They could sell them for very little money but rarely do as direct flights, but often do as part of a more competitive itinerary. This flawed logic created skiplagged.com and brought Hidden-City ticketing out from the darkness and into the mainstream.

Flights between Pittsburgh and Philadelphia, New York, Charlotte or Washington DC are sold for $400-600 a couple of weeks in advance. However, as the departure date nears, if business travelers do not fill flights, it will be hard on these routes for the carriers to sell leisure tickets, especially at higher prices. Leisure customers are less likely to book last minute trips without incentives and airlines can open and close award space as the aircraft fills up.

Variability That Works for Passengers

Avianca’s style of variability (and it’s wide and deep, nearly on a route-by-route basis) is unique but it plays well in the way that customers feel it should. For example, short, direct flights cost the airline less money, so customers rightly feel they should cost less.

Pricing short flights for less and long flights for more is fair to everyone and it allows Lifemiles customers with smaller balances to engage with the brand and derives value from the program.

Without Giving Up The Chart

The beauty in all of this is that while Avianca has made a handful of changes over the last year, they have been fair to both the carrier and the customer. It’s not as if Avianca has increased the cost 25-100% like the US majors did a couple of years ago. Further, these changes keep the award chart intact. It gives customers goalposts by which to focus their engagement. They know what they should pay for a trip and occasionally, those seats may be unavailable, but at least there is an approximate cost available to the flyer in advance.

American Airlines, Pay Attention

I mentioned in my post two weeks ago that American Airlines would probably change toward a variable award chart but doesn’t have to because they essentially already offer one. Gary Leff drafted on this post, you’re welcome Gary, but added a lot of good content. Hopefully, American Airlines is paying attention to Avianca’s innovative approach and models their program accordingly. Further amalgamation at this point would be a terrible shame, especially when Avianca is doing such a great job of being fair and delivering value.

What do you think? Does this represent good value for money/points? Do you think that this could be a guide for other programs looking to adjust their charts?

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About Author

Kyle Stewart

Kyle is a freelance travel writer with contributions to Time, the Washington Post, MSNBC, Yahoo!, Reuters, Huffington Post, MapHappy, Travel Codex and many other media outlets. He is also cofounder of PenAndPassport.com. He focuses on using miles and points to provide a premium experience for his wife and daughter.